Yale-payments-collaborative

This page provides links to background on the effort in 1999 by the University of Massachusetts and Clickshare Service Corp. to develop support for an "Internet Information Payments Collaborative."

The opportunity:
http://users.crocker.com/~newshare/OPPORTUN.HTM

The outline:
http://users.crocker.com/~newshare/OUTLINE.HTM

The Newshare vision, 1979:
http://www.newshare.com/vision.html

The need for collaborative action:
http://users.crocker.com/~newshare/vision.html

The founding of Visa -- an early model?
http://users.crocker.com/~newshare/reports/visa_founding.html

A review of Dee Hocks' book about Visa founding:
http://www.globalhome.com/news/chaordic/bookreview.html

Old UMass news release about IIPC:
http://www.mail-archive.com/cryptography@c2.net/msg00410.html

Densmore quoted in Steve Outing column Feb. 1, 1999:
http://www.bcn.net/~densmore/clippings/outing_micropayments.html

EXCERPT FROM OUTING COLUMN:

Will 1999 be the year that the industry starts paying attention again to microtransactions schemes? "The publishing industry has got to find during 1999 a viable business model for Internet information commerce," says Clickshare president Bill Densmore. "Most traditional publishers do not have one yet."

Densmore is a leading proponent of publishers looking to microtransactions to save themselves on the Internet. He says he doubts that any newspaper Web site, for example, could demonstrate that it's cash-flow-positive if it had to pay the real cost of the news that it presents on its site. "So the issue continues to be: How long will publishers continue to fund Web efforts as a marketing, rather than an operating, line item, and to what level?" he says. The purpose of IIPC is to figure out "how to cross the line into Web information commerce instead of Web information marketing."

Densmore predicts that during 1999, the publishing industry will coalesce around the need to share users and information, which will require an extension of current Internet protocols "to incorporate a means to exchange user profile data and track user movements among multiple independent domains," something that is not currently possible. The closest thing may be Disney's Go Network, which touts "universal registration" that works with its various affiliated sites — Go.com, ABCNews.com, Mr. ShowBiz, Infoseek, StarWave, ESPN.com, Disney.com, Disney Daily Blast, etc. However, it doesn't work outside those sites, of course.

The technology does exist today for publishers to have a shared microtransactions and content usage tracking system to support selling information content, Densmore says, but he thinks it may be more than two years before such a system is in place and used on a widespread basis. Why? "Most of the marketplace doesn't want it yet," he says. "I have been completely flummoxed by how long publishers have been willing to take losses playing with the Internet. But I think they are doing so because they are afraid to take the leap to new business models. ... I look to them to resist quite a while longer."

Resistance to the idea of charging is certainly understandable. Even if a publisher might like to receive a penny or a nickel for every time someone looks at an article on a Web site, and if a system existed to allow this to happen behind the scenes so consumers wouldn't have to click a button every time they come upon content that costs something, the immediate effect of charging for content at the outset would be serious for most Web sites. Densmore acknowledges, "Web site traffic will suffer terribly when a Web site switches to charging on any basis for news articles, and especially on a per-click basis." But, he argues, "publishers are fighting a war to preserve peace. They are devaluing the only currency they really have — original content used to draw eyeballs and thus advertising — by giving it away for nothing."

"They are creating on the Web a non-business which will cannibalize their existing businesses," he says. "They will shortly have no choice but to start charging. And when they do so, the losses on their Web efforts may temporarily rise. Then it will be time to focus on cost control. In the end, maybe they will create a sustainable business model."